Government has unveiled a comprehensive plan to revamp the Electronic Transfer Levy as a crucial component of its Medium Term Revenue Strategy.

This initiative highlights a dedicated effort to modernise and enhance this taxation policy, bolstering its efficiency and effectiveness.

In May 2022, the introduction of the e-levy - a tax on mobile money transactions that drew widespread criticism - imposed a 1.5% charge on all electronic and mobile money transactions exceeding GH¢100 per day. Its primary goal was to boost government revenue by securing larger tax contributions from Ghana's informal sector.

Then, in January 2023, the government lowered the tax rate from 1.5% to 1%. However, the notable feature of the levy - an exemption threshold for transactions below GH¢100 per day - still stands, even though its actual value has eroded due to inflation over the past year.

The impact of this levy on Ghana's public finances, its marginalized communities, and mobile money usage has sparked intense and divisive public debates, often devoid of empirical evidence.

This comprehensive restructuring of the Electronic Transfer Levy might represent a progressive stance on digital-age taxation.

Crucially, it resonates with the government's wider strategy to modernise its revenue collection techniques whilst ensuring a fair distribution of the tax load across varied economic sectors.

Additionally, the medium-term revenue strategy details the subsequent reforms:

Firstly, there are plans to broaden the withholding tax system, covering an array of tax categories. This measure seeks to improve taxpayer identification, make tax collection more efficient, and simplify the filing procedures, especially for incomes in the informal sector.

Secondly, the strategy includes provisions to streamline tax returns and closely examine the updated taxation framework, all geared towards curbing tax evasion and fostering voluntary compliance.

A key aspect of the strategy involves a thorough examination of archaic tax classifications, such as stamp duty, income tax stamp, and vehicle income tax. The aim is to align them with current market trends.

Furthermore, the strategy aspires to amplify the taxation of rental income, ensuring a fairer contribution from this domain.

Lastly, the strategy includes the adoption of taxation on Gross Gaming Revenue (GGR) for industry stakeholders and the introduction of withholding tax on winnings, signifying a considerable move towards a more inclusive and balanced tax system.